25 | Economic Science: Putting Theory to the Test
Episode 644: How Much Does This Cow Weigh?
Francis Galston came upon an opportunity to test how well regular people were at answering a question. He was at a fair where lots of people were guessing the weight of an ox. What he found shocked him. The average of their guesses was almost exactly accurate. The crowd was off by just one pound.
In this video, we’ll review equilibrium in the adjustment process, showing that the equilibrium price is the only stable price. Then we’ll take a look at equilibrium quantity, where quantity demanded is equal to quantity supplied, and how this plays out in a free market economy that seeks to maximize gains from trade.